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According to Animoca Brands CEO Yata Siu, the crypto space is in an uneven state around the world, with Web3 startups thriving in the Middle East and Asia, while North American crypto entrepreneurs are struggling in a challenging macroeconomic and regulatory environment.
Speaking with Cointelegraph at the Collision Conference in Toronto, Siu highlighted the main differences between the cryptocurrency business environment around the world, emphasizing that it is not “as bad as it looks.”
Web3 startups can still raise funding from venture capital firms, he said, but current conditions such as higher interest rates around the world along with a slump in cryptocurrency asset prices have raised the bar for newbies.
“Estimates have obviously come down, but the number of builders entering the space, the number of smart contracts deployed, the number of people is still on the rise. Overall, we are optimistic,” he said, adding that Animoc has added about 60 investments to its portfolio in recent months.
Despite the activity, the space is no longer as strong as it used to be. According to a recent PitchBook Cryptocurrency Report Q1 2023, crypto companies have raised $2.6 billion across 353 investment rounds. The amount of transactions decreased by 11% compared to the previous quarter, and the total value of transactions decreased by 12.2%.
Sioux’s comments follow major events affecting the cryptocurrency space following the massive crash of FTX in November 2022. For example, in the United States, the Securities and Exchange Commission has launched crackdowns on crypto companies in an attempt to regulate the industry through enforcement measures.
On the contrary, Hong Kong has implemented a licensing system for crypto businesses to mitigate the risks associated with digital asset markets. The UK has taken a similar approach by passing legislation that gives regulators the power to make and enforce rules for crypto businesses.
“If you think in terms of North America [о криптовалюте VC], that might sound bad. When you go to the Middle East, to Asia, it’s actually very bright,” Siu said. According to the CEO, the regulatory aspect has become a “hammer” for Web3 companies. “It creates a lot of fear because people don’t know what’s going on,” he continued.
The crypto veteran doesn’t believe in coincidences when it comes to countries’ different approaches to the industry. For the Sioux, the favorable environment in Asian countries and hostile movements in the US are part of the country’s new technology agenda.
“The promotion of Web3 as a narrative is also about national interests above all else, a sort of end-user interest in their own sovereign identity. And the US is doing everyone a favor. It’s sad, though, because I think the US is important in this. […] For political reasons, they leave it in the hands of other places around the world to play their part. But the interesting side is that it allows ecosystems to thrive in a way that has never happened before.”
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